BULLETIN NO: 99-05

TO: ALL NEW JERSEY PRIVATE PASSENGER AND COMMERCIAL AUTOMOBILE INSURERS

FROM: JAYNEE LAVECCHIA, COMMISSIONER OF BANKING AND INSURANCE

RE: DECISION POINT REVIEW AND PRECERTIFICATION FILINGS

Pursuant to N.J.A.C. 11:3-7(a) and N.J.A.C. 11:3-4.8(a), insurers are required to file for approval either a decision point review plan or a precertification plan. The Department has not received such filings from all insurers. In addition, the Department has received some decision point review or precertification filings that do not contain all the information required by the rules. The purpose of this Bulletin is to remind insurers of their obligations to file either a decision point review plan or a precertification plan for approval by the Department. If an insurer fails to file and obtain approval of its decision point review or precertification plan, then the insurer may not exercise the rights it has derived under the Automobile Insurance Cost Reduction Act and and N.J.A.C. 11:3-4 to oversee the medical necessity of a course of treatment or the use of specific diagnostic tests and may not impose additional deductibles or co-pays for failure to comply with either plan.

Based on its review of plans filed to date, the Department is providing the following clarifications to assist insurers in complying with the requirements for decision point and precertification plans.

1. N.J.A.C. 11:3-4.7(d) and N.J.A.C. 11:3-4.8(e) require that decision point review plans and precertification plans shall contain provisions for the disclosure of the plan requirements to injured persons and providers. Plans filed with the Department must include samples of all the information that will be provided to insureds at policy inception or renewal and when a loss occurs. Plans should also include any information that is intended for providers. These materials should clearly state:

a. When and how the insured or provider is obliged to contact the insurer including telephone and fax numbers;

b. That treatment in the first 10 days after the accident and emergency care do not require decision point review or precertification;

c. What basic information needs to be provided to the insurer to authorize treatment or a test. A requirement that the provider submit "clinically supported findings" is too vague. The provider should be informed what the minimum necessary information is, such as: date of accident; dates of previous treatment; diagnoses (ICD-9 code(s)) and clinical symptoms, diagnostic test(s) performed and their results, recommended test(s) and pre-existing conditions; and

d. The time in which the insurer will respond to requests for authorization to continue treatment or administer a test. N.J.A.C. 11:3-4.7(b) and N.J.A.C. 11:3-4.8(d) require affirmative action by the insurer to deny, based on the determination of a physician. Therefore, a failure to deny in accordance with that rule means that the treatment or test may proceed until such time as a denial based on the determination of a physician is communicated by the insurer. The materials should affirmatively state that if the insurer does not respond within the stated time-frame, the provider may proceed with the treatment or test. In addition, the plan should provide that if a physical or mental examination is required, treatment may proceed while the exam is being scheduled, and until the results are available.

2. Precertification plans should identify the medical director and vendor retained to provide this service, if any, and must detail the resources employed to carry out the responsibilities of the plan. A table of organization, flow charts regarding the decision making processes and a description of the experience of the individuals involved will assist in the assessment of the suitability of the plan.

3. If the insurer intends to precertify Durable Medical Equipment, the requirement should only apply to equipment above a certain dollar amount. For precertification of Durable Medical Equipment or prescription goods, the insurer must detail the vendor arrangements and distribution methods it intends to utilize to assure that access is reasonably convenient to all insureds statewide.

4. As noted above, N.J.A.C. 11:3-4.7(b) and N.J.A.C. 11:3-4.8(d) require that denials of treatment or administration of a test be based on the determination of a physician. Decision point review or precertificiation plans should include an internal appeal or "second look" provision that allows the provider to discuss the decision to deny with the physician.

5. Pursuant to Order A99-113, the Department will convene the Personal Injury Protection Technical Advisory Committee to monitor the implementation of N.J.A.C 11:3-4, including determining whether treatment for injuries sustained in automobile accidents is being inappropriately or arbitrarily denied by insurers. To assist in this review, data on how decision point or precertification plans are working will be requested from insurers. This Bulletin shall notify insurers that an Order for the collection and submission of data on implementation of the rules will be forthcoming and that insurers should consider developing procedures for the collection of the following types of data:

·
the number of requests for decision point review or precertification;

·
the number of requests denied as medically unnecessary;

·
the number of medical reviews scheduled; and

·
the number of comprehensive treatment plans submitted, approved or disapproved.